LONDON (Reuters) - LONDON, July 25 (Reuters) - British economic output shrank much more than expected in the second quarter of 2012, as unusually wet weather and an extra public holiday weighed on an economy already hit by the euro zone debt crisis and government austerity, official data showed on Wednesday.
”This is amazingly weak, the thing that surprised me more than anything was the size of the fall in manufacturing, it’s clear that it’s hostile but not as hostile as this. It’s clearly going to be reversed in Q3.
Everyone is going to worry that this means the recession is deepening, I think that’s wrong. we are still struggling along with minimal positive underlying growth.”
”It’s obviously a disappointing outcome. Everything’s a little bit weaker than expected. The construction fall looks implausible, the scale of it.
”The main disappointment is the services number. We thought even with the drag from the Jubilee that we would probably just about squeeze some growth out of that sector and it’s contracted.
”So there’s a lot of noise but looking through the noise you conclude the underlying picture is a little bit weaker. It makes more policy loosening more likely, though probably not before November.
“The only upside is a fall of that magnitude in Q2 means that you’re going to get some bounce in Q3.”
“This is a disaster for UK growth. It looks like construction has done a lot of the damage. In no uncertain terms disaster and on average for the year it’s looking very unlikely that we’ll be on the right side of zero growth. More likely we’ll be contracting.”
Pct change q/q -0.7 -0.3 -0.2
Pct change y/y -0.8 -0.2 -0.3
- Biggest qq fall in GDP since Q1 2009
- Biggest yy fall in GDP since Q4 2009
- Biggest qq fall in manufacturing output since Q1 2009
- Biggest qq fall in construction output since Q1 2009